Performance analysis of new product development projects

Does strategic planning enhance or impede innovation and firm performance? The current literature provides contradictory views. This study extends the resource-advantage theory to examine the conditions in which strategic planning increases or decreases the number of new product development projects and firm performance. The authors test the theoretical model by collecting data from 227 firms. The empirical evidence suggests that more strategic planning and more new product development (NPD) projects lead to better firm performance. Firms with organizational redundancy benefit more from strategic planning than firms with less organizational redundancy. Increasing R&D intensity boosts both the number of NPD projects and firm performance. Strategic planning is more effective in larger firms with higher R&D intensity for increasing the number of NPD projects. The results reported in this study also consist of several findings that challenge the traditional views of strategic planning. The evidence suggests that strategic planning impedes, not enhances, the number of NPD projects. Larger firms benefit less, not more, from strategic planning for improving firm performance. Larger firms do not necessarily create more NPD projects. Increasing organizational redundancy has no effect on the number of NPD projects. These empirical results provide important strategic implications. First, managers should be aware that, in general, formal strategic planning decreases the number of NPD projects for innovation management. Improvised rather than planned activities are more conducive to creating NPD project ideas. Moreover, innovations tend to emerge from improvisational processes, during which the impromptu execution of NPD activities without planning spurs “thinking outside the box,” which enhances the process of creating NPD project ideas. Therefore, more flexible strategic plans that accommodate potential improvisation may be needed in NPD management since innovation-related activities cannot be planned precisely due to the unexpected jolts and contingencies of the NPD process. Second, large firms with high levels of R&D intensity can overcome the negative effect of strategic planning on the number of NPD projects. Specifically, a firm's abundant resources, when allocated and deployed for NPD activities, signal the high priority and importance of the NPD activities and thus motivate employees to acquire, collect, and gather customer and technical knowledge, which leads to creating more NPD projects. Finally, managers must understand that managing strategic planning and generating NPD project ideas are beneficial to the ultimate outcome of firm performance despite the adverse relationship between strategic planning and the number of NPD projects.

Performing New Product Development (NPD) projects requires collaboration of lots of engineers, designers and managers. Companies run frequently such projects but not all of them are able to transform ideas into business success. One of these success factors is closely related to the efficiency of project coordination and management. This article deals with specific performance measures, namely, conformity measures, which can be used as a powerful parameter for NPD projects management. We consider an NPD project as a network of services provided by actors to each other. According to this idea, a given conformity measure, defined for every couple of actors, qualifies the quality of the service provided by an actor to another. Conformity measures appraise then the satisfaction degree of an actor who contributes to NPD project workflows regarding his/her collaborators. These service-links among actors allow to define four main parameters: forward, backward, upward and downward conformity measures. Once defined, two of them are illustrated through case studies. The first one concerns bicycle design process. The second one refers to a very simplified linear manufacturing procedure of a French car manufacturer, PEUGEOT™. For both the cases, we propose a visual aggregation method, which qualifies the global quality of the considered process.

New product development (NPD) project studies have attempted to identify a common set of factors that will indicate whether a NPD project will succeed or fail. A recent study has shown that there is no universal set of factors; also some factors have contradictory effects on a project’s success. A framework that classifies NPD projects into different contextual groups explains these anomalies. The grouping helps in determining the appropriate weights for the different success/failure factors, and the type of management organization and approach suitable for the project. The many subjective elements make classifying NPD projects into their appropriate contextual grouping difficult. Describes a rule‐based expert system which classifies NPD projects into their appropriate contextual groupings, suggests the level of emphasis for different success/failure factors and the right approach for managing.

Summary form only given. For continued success in the market place firms should introduce new successful products into the market, and gradually retire older mature products. The introduction of new products should be timed properly; it should also produce an appropriate product mix so that the strategy of the firm is continued and strengthened. The portfolio of R&D and new product development (NPD) projects should be structured such that the goals of the firm are met. There has been considerable interest in this field. Firms want to optimize the use of their resources invested in R&D and new product development projects. The R&D and NPD portfolio should fit the strategic vision of the firm in terms of-technology, growth and areas of business. Once the projects in the portfolio are plotted in the contextual model it is relatively easy to see where the holes in the portfolio are, and where the over representation of projects is. With such an understanding one can develop an optimum portfolio of NPD projects consistent with the strategy of the firm, and determine the appropriate number and type of projects one should have in each of the cells of the contextual cube. The type of mix of projects in the portfolio for a specific strategy has to be determined based on the strengths and weaknesses of the firm, as well as the managerial style of the organization. A very general set of guidelines is proposed in the paper. These guidelines take into account the nature of the projects, the type of effort involved and the strategic fit of the projects with the firm's strategy.

Upper management control of new product development projects and project performance

Lean holistic fuzzy methodology employing cross-functional worker teams for new product development projects: A real case study from high-tech industry

PurposeAlthough prior research provides evidence that production ramp-up is often disrupted by supplier-related problems, it fails to discuss how the original equipment manufacturer (OEM) and various types of suppliers integrate their functions and operations to secure preparations for production ramp-up. The purpose of this paper is to investigate OEM–supplier integration in a new product development (NPD) project to prepare for production ramp-up.Design/methodology/approachThe results presented in this paper are based on a real-time, longitudinal study of a single collaborative NPD project in the mechanical engineering industry. The NPD project involves seven suppliers and it is carried out in a large Swedish company (the OEM) and fits the theory-elaborating approach of this research.FindingsThis study argues that the aspect of timing in OEM–supplier integration, the OEM’s research and development (R&D) attitude toward collaboration and the OEM’s (R&D) operating procedure are challenges affecting the preparation for production ramp-up. The following three mechanisms to facilitate OEM–supplier integration in order to prepare for production ramp-up are also discussed: the mediator’s role, the OEM’s face-to-face meeting at the project level and suppliers’ formal face-to-face meetings with the OEM and internally.Originality/valueThis paper elaborates on and extends prior research on production ramp-up by conducting an empirical analysis that incorporates supplier integration in NPD. It bridges the gap between the literature on production ramp-up and on supplier integration in NPD and clearly indicates that supplier integration is an important prerequisite for successful production ramp-up.

Purchasing involvement in new product development: An absorptive capacity perspective

This paper presents an exploratory study of pre-development practices in Malaysian food and beverage manufacturing SMEs. A questionnaire survey is used to explore the difference in pre-development implementation practices between radical and incremental new product development (NPD) projects. The survey was performed at 164 food and beverage manufacturing SMEs. The respondents were chosen from those who are directly involved with pre-development practices, such as the owner/CEO of the SMEs. The analysis was conducted using Statistical Package for Social Science (SPSS) software version 17. Descriptive statistics and independent-samples t-test were carried out to generate and validate the results observed. The significant difference values for independent-samples t-test is less than .05 (p≤0.05). Survey results revealed the differences in pre-development implementation practices between radical and incremental NPD projects for several activities in pre-development phases. Incremental NPD projects considered listening to customer needs (p=0.00) is an important activity during idea generation phase, however radical NPD projects emphasis that analysis of competitors‟ products (p=0.02) and continuous product improvement (p=0.00) are crucial. Mean while during development of new product concept phase, and project evaluation phase radical NPD projects were more innovative compared to incremental NPD projects in several activities such as creating prototypes/product samples, linking company‟s operational capabilities with proposed product, and conducting a formal risk analysis. The significant values of the activities were between 0.00 and 0.04 which is lower than significant level 0.05.

Knowledge Management Strategies for Product and Process Design Teams

<p>In rapidly changing market environment, firms are investing a lot of time and resources into new product development (NPD) projects to make profit and to obtain competitive advantage. However, failure rate of NPD projects is becoming high due to various internal and external risks which hinder successful NPD projects. To reduce the failure rate, it is critical that risks have to be managed effectively and efficiently through good strategy, and treated by optimal responses to minimize risk cost. Four strategies are adopted to handle the risks in this study. The optimal responses are characterized by high reduction of risk costs with high efficiency. This study suggests a framework to decide the optimal responses considering the core risks, risk costs, response efficiency and response costs for successful NPD projects. Both binary particles warm optimization (BPSO) and multi-objective particle swarm optimization (MOPSO) methods are mainly used in the framework. Although several limitations exist in use for real industries, the frame work shows good strength for handling the risks with highly scientific ways through an example.</p>

This paper explores the innovation literature by focusing on technological evolution and revolution. Technological evolution is viewed in three perspectives: 1. the best time for new businesses to enter into markets, 2. the incumbents' response to the challenge from an entrant, and 3. the mortality of firms in an industry. The characteristics of each perspective are described in detail. The emphasis on the technological revolution is viewed as the comparison between sustaining technology versus disruptive technology. Critical success factors in New Product Development (NPD) projects are also described to look at how the differences of factors for achieving the success between NPD projects and other projects are. Finally, this research concludes that the alignment between NPD projects and innovation could be examined.

PurposeThis study surveys a broad spectrum of new product development (NPD) projects from the biochemistry industry in the USA, Canada, Germany, the UK, and Belgium with the purpose of exploring the role of the organizational activity factors in the NPD success.Design/methodology/approachDrawing on the resource‐based view of the firm, the authors present a set of hypotheses concerning the relationship between the people resources, development resources, testing resources, and launch resources committed to NPD projects and their financial success. In addition, the effect of the firm's international market involvement on the NPD project success is considered. In this study, testing of the hypothesized relationship is accomplished through linear probability model, binary probit model, and binary logit model.FindingsEmpirical results generally support the predictions from the theory. Specifically, the findings of this study show that: the involvement of a strong champion, use of a multi‐disciplinary team, and focus of a dedicated team are key factors for NPD project success among the people resources; the detailed market research has a significant impact on the project success in the development phase of the NPD process; the allocation of resources to the testing of the product with the final customer, market testing, and production start‐up positively influences the NPD project success; advertising quality plays a key role in the NPD project success during its launch; and the NPD project success is positively associated with the degree of a firm's diversification into international markets.Originality/valueThis study provides several guidelines for product managers seeking to launch new products. It offers critical insights into the identification of firm resources that influence the NPD project success. This study also has important implications for firms that consider diversifying or have already diversified into international markets. Understanding the role of market diversification in the NPD project success advances the ability of managers to direct their efforts in international market involvement.

This study addresses the role of visual representations in supporting communication between an R&D team and geographically distributed suppliers for a new product development (NPD) project. It specifically focuses on the design and use of visual representations as a feasible way for communication between the distributed actors when they face communication challenges originating from differences in skills in the English language, but also from differences in work experiences. Relying on empirical materials from a Swedish manufacturing company in the mechanical engineering industry, this paper makes the following contributions to the literature. First, it shows that visual representations are effective boundary objects able to support process-oriented and product-oriented communication in distributed NPD projects. Second, it illustrates that visual representations do not necessarily have to follow graphic design principles, but can still be effective if distributed actors share the same project context. Finally, it highlights the need for a dynamic and context-dependent perspective on communication in NPD projects.

An exploratory study of the effects of supplier relationships on new product development outcomes